Dubai World, the indebted conglomerate at the heart of the sheikdom’s credit problems, may sell off assets it acquired during a multiyear building and buying spree to raise cash, a senior government official said.
Dubai Finance Department Director-General Abdul Rahman al-Saleh did not say which pieces of the company were for sale in an interview posted on al-Jazeera’s Web site yesterday. However, he emphasized that the assets in question would be the company’s, and not those held by the government of Dubai.
The finance chief said the primary aim of restructuring the state-backed company was to ensure it remains viable for years to come.
“It is premature to announce any plans now, but the main goal is that Dubai World will continue in the future as a company with a new framework to face challenges,” al-Saleh said.
He did not elaborate.
The sale of any major Dubai World assets would mark a shift for the conglomerate, which repeatedly downplayed questions it would need to unload pieces of its global empire even as Dubai’s financial concerns grew more acute over the past year.
That perception began to shift last week, when the company said tersely that its restructuring would include an assessment of options to reduce its debt load, “including asset sales.”
Al-Saleh’s latest comments were the clearest sign so far that Dubai’s leadership is growing more comfortable with the idea of selling off pieces of the company.
Over the past years, Dubai World relied heavily on borrowed money to carve out markets far beyond the tiny emirate’s shores.
Its slogan boasts: “The sun never sets on Dubai World.”
The company runs the world’s fourth-biggest seaport operator, DP World, with operations on six continents. Its wide-ranging investment portfolio includes luxury retailer Barney’s New York, a stable of high-end US hotels and stakes in Las Vegas casino operator MGM Mirage and Cirque du Soleil.
At home in Dubai, the company’s property arm Nakheel built man-made islands in the shape of palm trees and a map of the world.
The iconic British cruise liner Queen Elizabeth 2 sits in a downtown Dubai port awaiting renovations to turn it into a floating hotel.
Many lenders at home and abroad lent Dubai World money on the assumption that, as a company controlled by the government, it had implicit state backing.
Al-Saleh, however, reiterated the Dubai government’s position that there was no state guarantee in Dubai World.
The company has US$60 billion of outstanding debts. Late last month, it surprised markets by requesting a delay in paying billions of dollars of debt coming due this month.
“Banks believed the Dubai government ... would not want to risk its reputation, but [the] government effectively called their bluff” when it asked for new repayment terms, said Jan Randolph, director of sovereign risk at IHS Global Insight.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to